Drax agrees £10m contract to supply future coal power

Drax Group, the Yorkshire power plant that is in the midst of a process to create more biomass power, said on Friday that it has agreed to provide £10m worth of future coal power capacity.

The FTSE 250-listed Yorkshire power plant said it had provisionally secured a total of 1,217 megawatts of capacity from two existing coal units, de-rated from 1,382MW.

Agreed for delivery between October 2021 and September 2022, the contracts are a price of £8.40 per kilowatt and are worth £10m.

Two open cycle gas turbine (OCGT) projects participated in the auction but exited above the clearing price, Drax said, predicting these projects will now go on to participate in the next T-4 auction.

Last month the UK government responded to the consultation on cost control for additional biomass conversions under the Renewables Obligation scheme, by saying it would introduce an amended version of a generator cap.

Drax said this would allow it to convert a fourth unit to biomass, beginning in the second half of 2018 and returning it to service late in the year, "accelerating the removal of coal-fired generation from the UK electricity system, whilst supporting security of supply".

The government has proposes that, rather than imposing a cap on renewable obligation certificate support for any future biomass unit conversions, a cap would be applied at the power station level across all units eligible for Renewable Obligation Certificates. This would protect existing converted units and limit the amount of incremental ROCs attributable to additional unit conversions to 125,000 per annum.